If Alberta restaurants can’t find workers, they should pay more

From the moment Ottawa clamped down on the use of temporary foreign workers by restaurants, we’ve heard dire warnings, especially from Alberta, that many businesses will be forced to shut down because they are unable to find workers. The counter-argument to that has always been: Why don’t you pay more, then?

Today, Statistics Canada released its job vacancy data for April and, as expected, it showed Alberta has the tightest job market in the country with a vacancy rate of 2.4 per cent, nearly double the national average. And indeed, in Alberta’s restaurant and hospitality sector, the hunger for workers is far higher with a job vacancy rate of 7.7 per cent, close to three times the national rate. Speaking to the Calgary Herald, Todd Hirsch, chief economist with ATB Financial, pinned the blame squarely on the changes to the temporary foreign worker (TFW) program.

But what about the argument that if Alberta restaurants want to attract workers, they should hike their pay? There’s a lot to suggest that’s exactly what they should be doing. Because, as the chart below shows, when you put the restaurant industries in Alberta and Ontario side by side, Alberta restaurants could be doing a lot more to lure staff.

In a nutshell, even though the restaurant job vacancy rate is off the charts in Alberta compared to Ontario, restaurant wages in Alberta have not risen any faster over the past three years than they have in Ontario. Yes, Alberta restaurants pay higher than Ontario restaurants, but shouldn’t supply and demand dictate that the pay out West be even higher, and rising faster, than back East?

It’s amazing that some people just don’t get that. It’s like a Tim Horton’s franchise in Ft.Mac can somehow exist the same way one does in Brandon, MB, except they just have to pay their people $100,000 to pour coffee.

The point of the article is precisely that Ontario and Alberta are two completely different types of economy.

In the vicinity of the oilpatch, yes competition for workers is going to be higher, so yes Tim’s will have to pay more. That may well mean that Tim’s will have to charge more for a cup of coffee, but lets face it the workers making money can afford it. In any case, their alternative is a drive down to Brandon for a cup of coffee. The local cost of living is going to be higher so the Tim’s worker needs those higher wages to compensate.

One of the problems is that restaurant chains like to have uniform pricing for marketing purposes. If you start with a fixed price, independent of local labour costs then you have a problem raising wages to attract workers. The government should not be introducing programs to solve the business model problems.

Em, the point of the comparison is to show that despite the differences in the two economies, the rate of pay in Alberta is not changing faster than in Ontario. The law of supply and demand says it ought to. So it is a good comparison, as it indicates that Alta restaurant owners are not responding to market pressures and are instead looking to government to subsidize them by importing cheap foreign labour.

It’s not that difficult a concept. Even you should be able to grasp it.

THIS is where the ‘true believers’ ( C.D.Howe, Fraser Inst., & Conservatives across the land) in the ‘free market forces of supply & demand’ should stand up and demand “let the market be the market” with no government interference……no subsidies, no TFW’s. The all knowing market will fix everything.

The market will fix it, if given the chance. If you don’t have workers to cook your food, clean your floors, or do your dishes and serve your food, you will eventually go out of business.

Simple really…….raise your starting wages, raise your prices to compensate, and given the wealth in Alberta, getting paying customers should not be a problem. For those companies that can’t cope….they will indeed fail and cease to exist, leaving the more competent to fill the void.

We all know the cost-of-living in Alberta is much higher than it is in Ontario. or anywhere else for that matter.
All these fastfood, and other restaurants in Alberta already charge 3 times more for the same Tim’s coffee, so let them pay their workers more too.
For example, $20/hour in Alberta, will get you just as far as $14/hour in Ontario, by the time you factor in Alberta’s much more expensive cost-of-living,…these days. -and that ain’t much at all, -that’s almost poverty class.

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